Slovenia Weekly

Slovenia is a great opportunity for investors

24.10.2014

Editorial

2015 budgetary measures to put Slovenia on the right track to growth and fulfilling commitments. Photo: Mostphotos

Slovenia needs foreign direct investment. Therefore, the government will seek to provide a stable political and business environment, particularly by stabilising public finance by lowering excessive deficit, further stabilising the banking and financial system and continuing privatisation. At the FDI Summit Slovenia 2014 international business conference on Wednesday, PM Miro Cerar said that the Slovenian government remains committed to internationalising the economy and attracting investments, particularly greenfield investment. The finance minister, Dušan Mramor, announced lowering the burden on the most innovative, hard-working and productive employees, the elimination of red tape and simplifying procedures to obtain building permits. In order to attract foreign investors, all aspects of the business sector and the fast response of all institutions and the administration are important. The foreign minister, Karl Erjavec, also announced that the government would strengthen and improve the system of economic diplomacy. The participants who discussed effective inclusion of foreign capital in developmental and investment strategies agreed that Slovenia was very attractive, but has to do more in terms of appropriate infrastructure and administration that will serve companies to increase investment potential. “Slovenia is a great opportunity for investors,” said PM Cerar, adding that there is still a lot of work ahead for the government.

One of the first tasks will be to draw up revised budgets for 2014 and 2015. "With the range of economic measures for 2015 accounting for 715 million euros approved by the Government, Slovenia seeks to boost economic growth,” said finance minister Mramor, adding that this would reduce the deficit in accordance with fiscal commitments. This is also the Government’s response to warnings from Brussels regarding Slovenia's draft budgetary plan, which was referred to the European Commission last Wednesday. More funds will be allocated for investment, while activities will focus on enabling a recovery in order to create high-quality jobs, higher added value and the sustainable development of a socially responsible economy and public sector.

In 2013, Slovenia’s deficit was over 14 per cent of GDP. The main reason for the high deficit was capital injections of banks. Therefore, Minister Mramor believes that the results of the oversight of Slovenian banks (Nova Ljubljanska banka, Nova Kreditna banka Maribor and SID Bank), which will be published by the ECB on Sunday, will show that there is no need for more taxpayers’ money for additional capital.

Slovenia’s nominee for commissioner, Violeta Bulc, did her homework excellently and convinced MEPs with “a high degree of integrity and independence, commitment to Europe and leadership experience”. After the competent committee voted on Wednesday, the way was clear for the new college of commissions, which include the current Slovenian Deputy Prime Minister and Minister for Development, Strategic Projects and Cohesion Projects, Violeta Bulc. Her fresh approach to transport policy will enable her to lead this significant and relatively large transport portfolio, where she will be able to utilise her innovativeness and entrepreneurial experience.

During the night in Brussels, EU leaders reached an agreement on 2030 energy and climate goals. After the summit, the Slovenian PM said that he was satisfied with the agreement, as the EU goals are ambitious and take into account Slovenia's particularities, particularly the above-average transit burden.

Draft budget for 2015: structural measures for economic growth

"With the range of economic measures approved by the Government today, Slovenia seeks to boost economic growth,” said PM Cerar to the press after the government session on Wednesday. Finance minister Mramor stressed that envisaged measures account for 715 million euros, which will bring down the deficit in line with fiscal commitments. This is also the Government’s response to the warnings from Brussels regarding Slovenia's draft budgetary plan, which was referred to the European Commission last Wednesday. At today's session, the Government also discussed the draft revised budget for 2014.

In continuation, Mr Mramor said that while it was not possible to apply comprehensive structural changes to the 2014 budget due to time restrictions (estimated deficit according to ESA 2010 is 3.4 per cent), they were prominent in the measures for 2015. He mainly stressed greater investment expenditure, which will rise by 23 per cent, and greater expenditure on goods and services, which will increase by 10.3 per cent.

When drawing up the 2015 measures, a lot of attention was put to streamlining the public sector, taxes (including raising taxes on financial and insurance services and introducing a tax on sugar and artificial ingredients added to fruit-based beverages), and efficient collection of taxes. This is linked to a major part of measures aimed at reducing grey economy, which upgrade the current campaign. Crucial measures regarding expenditure include streamlining and centralising public procurement, wider use of ‘e-serving' in administrative and judicial proceedings, and streamlining labour costs in the public sector.

The ministries will present the measures relevant to their sector in the next few days and weeks. Amendments to acts and other legislation enabling implementation must be drafted in 14 days or by 30 November if their implementation does not presuppose other amendments to legislation.

Social agreement as a basis for easier exit from the crisis

In the presentation of the measures, the PM Miro Cerar said that the Government had also approved the guidelines for concluding a social agreement and negotiations with the social partners, who were the key stakeholder, with which the Government sought to cooperate in order to find a way to end the crisis. He said he expected constructive cooperation from the social partners, which would contribute to the common good of Slovenian society.

PM Cerar: The Government is firmly committed to internationalise economy and attract direct foreign investment. Photo: STA / Source: Cabinet of the PM

Slovenia needs foreign direct investment. Therefore, the Prime Minister Miro Cerar said that the government was firmly committed to internationalise economy and attract direct foreign investment at the FDI Summit Slovenia 2014 international conference on Wednesday. Therefore, the Government is decided to create political and business environment, particularly via further stabilisation of public finance by decreasing excess budgetary deficit and continuing privatisation procedures, which will make Slovenia more attractive to foreign investors. According to Cerar, Slovenia’s advantages are geographically strategic position by the Western Balkans, traditional trade links with Europe, highly educated work force, infrastructure and focus on innovation.

He said that the measures to attract foreign direct investment focused in particular on potential investors interested in long-term development strategy, and sustainable and responsible business practices.

The Slovenian PM reiterated that Slovenia would continue the privatisation process and stressed that crucial infrastructure will remain owned by the state. "We believe that privatisation can be a signal of openness and transparency to potential foreign investors," said the PM.

The conference was also attended by the finance minister Dušan Mramor, who announced lowering the burden on the most innovative, hard-working and productive employees, the elimination of red tape and simplifying procedures to obtain building permits. Mramor supports the continuation of privatisation, which is not only necessary in order to lower public debt, but above all so that the companies will get owners who will provide the capital and enable growth. According to Mramor, this can contribute to opening Slovenian economy.
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